Most business entities are required by the Texas Business Organizations Code to continuously maintain a registered agent in Texas, but it’s also a smart move for your business.
If you’ve completed the business formation process then you likely already know that Texas registered agents are an indispensable part of running a business. And they’re also really handy when it comes to compliance.
I’ll tell you all about the definition of a registered agent, what it does, and why you need one for your business entity.
What Is a Registered Agent in Texas?
A registered agent can be either a person or business that agrees to accept service of process, legal mail, and documents on your company’s behalf at your registered office address during regular business hours.
I know it seems weird that anyone would agree to send their important documents and mail to some person at another address. But that’s why another major component of registered agent services includes document delivery.
Through either mail forwarding or an online document management system, your Texas registered agent will deliver your mail and any potential service of process to you so that you’re aware of important official and legal issues. And many of the best Texas registered agent services also offer compliance alerts to make sure that you’re kept abreast of important filing deadlines with the Texas Secretary of State.
If you have a foreign business entity that operates in multiple states, you’re required to keep a registered agent in each of those states. You can accomplish this by either designating a different registered agent in each state or hiring a national registered agent service, which is a convenient way to meet all of your company’s legal requirements.
Some people refer to a Texas registered agent as either a statutory agent or resident agent. These terms are synonyms for the same service.
What Is the Purpose of a Registered Agent in Texas?
Upon reading my definition of a Texas registered agent, you may have concocted a scheme involving a PO box and periodic checks to meet your business’s legal requirement for a registered agent. But there are a few reasons that a PO box won’t work.
Your registered agent in Texas is required to be physically present during business hours at the physical street address you have registered with the state. Because of the physically present bit, you can’t just check in on your PO box.
But your Texas registered agent can do lots more than simply provide you with a physical address and receive service of process!
Compliance
Compliance filing dates for things like annual reports or paying franchise tax typically only come once a year on the anniversary of your business’s establishment. Because of this, it can be tricky to remember compliance deadlines, but your Texas registered agent will keep track of them for you.
Your registered agent in Texas is considered your official point of contact, and as such it becomes a sort of middleman between your business and government agencies. This means that if you have a good Texas registered agent, it’ll issue a compliance alert when it’s time to file your annual report or franchise tax.
Management of Important Documents
The street address stipulation may seem trivial to you if your business doesn’t have a physical location, but your Texas business address is important for reasons beyond meeting the physical address requirement of Texas law.
Your principal address is where your company’s mail and legal documents will be sent, and you need to get your hands on these things so that you can keep them as part of your business’s records. Many of the top Texas registered agents offer online document management systems, to which they scan and upload your mail and documents on the day they receive them.
You’re then able to access your mail and documents more quickly than you would with mail forwarding, and it provides you with a digital document storage system, which is a convenient storage solution.
Who Can Be a Registered Agent in Texas?
Most of the requirements for registered agents are the same, regardless of which state you’re in. Here are some of the Texas registered agent requirements your registered agent will need to meet:
- State laws. Some states have created laws that define the requirements of registered agents in their jurisdiction. To make sure that your registered agent meets the legal requirements of a registered agent in Texas, you’ll need to double-check the laws in the state.
- 18+ years of age. Texas requires that every Texas registered agent be at least 18 years old.
- Physical address. Your registered agent address is required to be a street address. That eliminates PO boxes from being used.
- Who you can designate. So long as your chosen registered agent meets all of the legal requirements for a registered agent in Texas, you’re free to designate whomever you want. This means that you can choose a lawyer, employee, friend or family member. Just make sure that you choose they’re available during normal business hours.
What Happens If My Business Operates Without a Registered Agent?
You may wonder what happens if your Texas registered agent doesn’t remain posted at your registered agent address during business hours and misses a service of process from a process server. The process server will move on to plan B, which is to deliver the service of process to the Texas Secretary of State.
This is standard practice for process servers, but it’s bad news for your business entity. Instead of being notified about possible legal proceedings taking place against your company, they’ll take place without your presence or legal defense. A judge can also issue a default judgment against your company, which could have disastrous financial consequences for your company.
It’s also illegal for a business entity to not maintain a registered agent in Texas, and the Texas Secretary of State can revoke your company’s good-standing status on those grounds. Without good-standing status, your Texas business may no longer qualify for business loans or other financial assistance or be allowed to expand to other states, and could no longer be permitted to conduct business in Texas.
If you own a Texas LLC, then you’ll likely be hit with “administrative dissolution” on top of everything else. This is when the Texas Secretary of State removes the legal authority of a limited liability company to conduct business in the state due to noncompliance with legal requirements, like maintaining a registered agent in Texas or meeting compliance filing deadlines.
Without legal recognition, running a Texas LLC is quite risky. Ordinarily, a limited liability company has liability protection, which keeps a business owner from being personally or financially responsible for the company. But in the absence of liability protection, the assets of the Texas LLC owner are up for grabs if the company is sued.
Don’t assume that you’re safe if you don’t own a Texas LLC. If you own any sort of business entity—limited liability partnership, sole proprietorship, or corporation—you’re required to maintain a registered agent in Texas, and you can face drastic consequences if you don’t.
Can I Be My Own Registered Agent in Texas?
On paper, nothing prevents you from being your own Texas registered agent. But it’s a good idea to learn about the pros and cons of being your own registered agent and those of hiring a Texas registered agent service.
Cons of Being Your Own Registered Agent
Liability
The biggest downfall of being your own agent is the numerous negative repercussions of missing a service of process. You could lose your company’s good-standing status, have default judgments issued against you, and more. These catastrophes are usually enough to turn business owners off the idea of being their own agent.
Lack of Privacy
Being your own agent means that you’ll have to list much of your personal information on the public record. You’ll be forced to list your name, phone number, and (if you don’t have a physical location or street address for your business) your own address.
The problem with information being listed on the public record is that you can’t control who accesses it or what they use it for. Hackers and cybercriminals can use this information to steal your identity or commit other crimes in your name with lightning speed.
And that’s not to mention that the idea of everyone having access to your personal information and using it for their whims is enough to make your skin crawl.
Time
To perform the duties of a Texas registered agent properly, you’re required to stay posted at your Texas business address during regular business hours so that you don’t miss service of process or important legal documents.
The catch is that your business also probably operates during regular business hours, which makes it virtually impossible to be a registered agent and manage your business simultaneously. That is, until some technological genius develops a way for us to be in two places at once (looking at you, Elon Musk!).
Pros of Being Your Own Registered Agent
The one good thing that comes from being your own registered agent is that you won’t have to pay fees to a Texas registered agent service.
However, now that you know about the perils of missing a service of process, lack of privacy, and time constraints involved with being your own agent, you may decide that it’s worth it to pay fees to a quality Texas registered agent service just to prevent extra work for yourself and to enjoy peace of mind.
The good news is that most registered agent services are relatively inexpensive.
Should I Use a Registered Agent Service?
Here are some of the reasons that a business owner might choose to use a Texas registered agent service:
- If you choose a top-tier Texas registered agent service that provides compliance alerts, it’s not as likely that you’ll miss a filing deadline with the Texas Secretary of State.
- If you hire a registered agent service, you’re not likely to miss a service of process and encounter problems with the Texas Secretary of State.
- Without the added stress of working two full-time jobs as both a registered agent and business owner, you can breathe a sigh of relief knowing you’re free to manage your company more efficiently.
- Foreign entities that operate in multiple states can use a national registered agent service to meet their legal requirements conveniently.
- Business owners of businesses that don’t keep normal business hours can hire a registered agent service so that they’re not required to close up shop and then clock in as their own registered agent. Even business owners need to sleep sometime!
- Owners of businesses without physical locations can benefit from a registered agent service because they can list their registered agent’s information on the public record in lieu of their own.
- Unless you’ve run a business for a while, you may not be aware of the ridiculous amounts of junk mail that businesses are sent. If you’re your own agent, you’ll have to figure out what to do with it all on your own, but a registered agent service can take care of this menial task for you.
- You can choose a registered agent service that has premium registered agent services that you don’t want to miss out on, like identity theft protection or payment of state fees.
- If you haven’t legally established your business entity yet, you can choose a registered agent service that also provides formation services. This allows you to take advantage of promotions like a year of free registered agent service, which is hard to pass up.
Ultimately, as the owner of your business, only you can decide whether a registered agent service is the best option for your company. But I always recommend that new businesses use a registered agent service.
What Is the Best Registered Agent Service?
There are a lot of factors that go into choosing the best registered agent service. Here are some of the things you should consider when choosing your registered agent.
Service Features
You won’t unlock the full potential of registered agent services if you choose a registered agent service that doesn’t deliver everything you need.
Some registered agent companies only supply basic mail forwarding, which can be slow. (It’s called “snail mail” for a reason!) And others provide online document management systems where your legal documents, mail, and service of process are uploaded the day your registered agent receives it, and you get an electronic storage system to boot.
Some registered agent providers only supply you with a compliance calendar pre-filled with filing deadlines, which is nice but you can easily forget about it or lose it. Others offer worry-free compliance with compliance alerts about impending deadlines with the Texas Secretary of State.
Choose a registered agent service that offers all of the services your business needs.
Value
To learn whether a registered agent is worth it, compare its service catalog to its fee. If the registered agent company doesn’t offer many quality services but charges an expensive fee, that’s not a company that provides much value.
While we’re on the subject of value, you should avoid “budget agents.” These sneaky registered agent companies advertise prices as low as $39–$59 then charge loads of additional fees for services you need, like compliance alerts or online document management systems. It’s one thing to look for services that are easy on your wallet, but budget agents are not the way to go.
Easy Sign-Up
Some registered agent providers have complicated sign-up processes with loads of paperwork for you to fill out and tasks that make you feel like you’re jumping through hoops—and even then it still takes weeks or even months to complete. So to ensure you don’t choose a registered agent service that wastes your time, you should choose a registered agent with a speedy and automated sign-up process.
User-Friendly Interface
You’ll use your registered agent’s system a lot, so it’s important that it’s easy to use. Some registered agent companies have systems with complicated navigation, confusing layouts, and a virtual minefield of bugs and glitches that cause it to freeze up and crash at every turn. So to save yourself some hassle, choose a registered agent with an easy-to-use interface.
Customer Service
So, you’ve chosen a registered agent with an excellent selection of services, speedy sign-up process, and user-friendly interface. You’ll still eventually have questions about your service or encounter some sort of technical problem that you need help with. And because your registered agent can either lend to your company’s success or topple it, quality customer service is critical.
I combined all of these factors with my four-stage investigative process to find that Northwest Registered Agent is the best registered agent service. If you’d like to learn more about how to choose your company’s registered agent, read my guide on the Best Registered Agent Services.
Conclusion
Every new business owner is expected to learn a massive amount of new information. And to top it all off they have to keep up with compliance filing deadlines with the Secretary of State. Luckily, registered agents are here to take some of the workload off your hands and help keep track of these deadlines, freeing up valuable time and mental space for other important tasks—like running your business!
If you haven’t landed on a decision about your business structure and you’d like to learn more about LLC formation, read my guide on How to Start an LLC. If you’d like a bit of professional guidance during the formation process, then read the Best LLC Formation Services.
Texas Registered Agent FAQs
What’s the Difference Between a Commercial and a Noncommercial Registered Agent?
A commercial registered agent is a business that registers itself as a commercial agent with the Secretary of State. Some states require all professional registered agent service providers to register as commercial agents.
A noncommercial registered agent is a person or professional service that hasn’t registered as a commercial agent with the Secretary of State. So if you’ve chosen a family member as your registered agent, then their official job title is “noncommercial registered agent.” It has a nice ring to it, doesn’t it?
How Do I Change the Registered Agent for My LLC?
It’s pretty easy to change your registered agent in Texas. You have to file a Change of Registered Agent form. Just add some information about your new registered agent (like their name and address) and submit the form to the Texas Secretary of State. You’re limited to filing by mail, fax, or in-person—no online filings. And there’s a charge of $15 in state fees.
How Much Does a Registered Agent Cost?
The cost of your registered agent depends on a number of factors. Some of these include the services you choose and which registered agent provider you hire. Registered agent services vary between $39–$299 per state, per year. If you want to learn more about registered agent pricing, read my guide on the Best Registered Agent Services.
